Products for creativity made in Ukraine are sold on the international marketplaces Amazon, Allegro and in offline networks Empic, Biedronka, Barns & Nobles, Virgin Megastore. In Ukraine, the demand for these products has been growing rapidly since the beginning of the COVID-19 epidemic. The Great War did not discourage Ukrainians from creativity. How entrepreneurs managed to move Chinese imports and gain a foothold in international markets
The Next250 list of promising companies from Forbes Ukraine includes three companies that produce goods for creativity, namely paintings that are painted by numbers. The products of these manufacturers are sold in the USA, Germany, Portugal, the UAE and dozens of other countries.
Sales of creative goods soared during COVID-19. In 2021, Rozetka sold 2.5 times more paintings by numbers than in 2020, the press service of the marketplace said. Even a full-scale war did not discourage Ukrainians from drawing. Among the products in the "painting and graphics" category, the share of paintings by numbers on Rozetka increased by 25% in 2022, according to the company.
In the first six months of 2023, more than 26,000 paintings by numbers were bought on the Prom.ua marketplace, which is 40% more than in the same period last year, said Yulia Novachenko, head of the Prom.ua marketing team.
"During the quarantine, we received a lot of feedback that our paintings save people," says Elena Yelagina, founder of Ideyka. Andriy Kravets, the founder of Brushme, says almost the same: "People spent more time at home, and the niches that offer products for embroidery, drawing, and modeling have grown fantastically. At that moment, there was the largest increase in new players in the sales niche."
According to the consulting company Pro-Consulting, the Ukrainian market of paintings by numbers is about UAH 300-400 million. The revenue of the three participants in the Next250 rating exceeds the volume of the Ukrainian market, as they sell many goods for export. According to Pro-Consulting estimates, there are about 80-100 manufacturers and 20 importers in Ukraine, but it is almost impossible to single out the leaders and market shares. A large number of manufacturers work as sole proprietors or without registration at all, said Andriy Mokryakov, a consultant of the analytical department of Pro-Consulting. There are also problems with transparency among the largest players, some of them refused to be mentioned in this material so as not to attract the attention of inspection authorities. We wrote only about those market leaders who are ready to share financial results.
Manufacturers of creative goods unanimously say that the main competitors are Chinese manufacturers. Even with logistics costs, their products are cheaper. Ukrainian entrepreneurs compete with unique design solutions and non-standard new products. The example of this industry shows that Made in Ukraine can be competitive in the world in a very tough market.
What competitive strategies have enabled entrepreneurs to bypass China?
The top five most popular manufacturers of creative goods on Rozetka include Strateg, Brushme, Art Craft, Origami and Ideyka, the marketplace said. The founder of the latter, Elena Yelagina, has been distributing children's goods since 2007. In 2014, it launched the production of goods for creativity. It was difficult to find manufacturers of molds and art paint, the entrepreneur recalls.
"Our goal is to provide an aesthetic, high-quality product at the price of a Chinese analogue," she explains. Ideyka collaborates with about 100 artists, mostly from Ukraine. "I see this as our special goal – to show the world modern creative Ukraine," says the founder.
What makes it possible to compete with Chinese analogues? Yelagina identifies several factors. Firstly, it is our own full production cycle. The company manufactures a base for paints, has its own coloring studio, its own molds and injection molding machines for the manufacture of containers.
Fairly high production runs made it possible to automate production. A separate factor that helps to withstand competition is logistics. Elagina's product is oversized and inexpensive. Logistics from Ukraine to Europe is cheaper than delivering goods of the same size from China. "We import only some materials from Asia and are constantly working on import substitution," she says.
Ideyka products, the average retail price of which is UAH 200-300, are presented in the METRO, ATB, Varus, Aurora, Epicenter, Eva, Comfy, Wog and OKKO chains.
A year and a half ago, the company opened a representative office and warehouse in Poland. This helps to sell goods in the European market, because European companies do not risk entering into agreements directly with a Ukrainian manufacturer. In addition to Poland, Ideyka is represented in Hungary, Moldova, Lithuania, Latvia, Estonia, Georgia, Portugal, Germany, and Albania. The founder is negotiating with companies from the USA, Singapore, and Australia. According to Yelagina, in 2022, the company sold 1.6 million units of its goods at an average price of UAH 125, and revenue increased by 45% compared to the previous year, to almost UAH 200 million.
The founders of Brushme ended up in the painting-by-numbers business almost by accident. In 2016, the founders became interested in the product and decided to test the demand for it before launching their own production. They came up with a name, logo and tried to sell the already existing no-name paintings in Ukraine under their brand on the Brushme website, said the company's co-founder Andriy Kravets. The six-month experiment was successful, so the entrepreneurs decided to go offline and opened an island for the sale of paintings by numbers in one of the shopping centers in Chernivtsi. In 2018, there were already 24 of them in 13 regional centers of Ukraine.
They started their own production of Brushme only in 2020. They make acrylic paint, paint containers and wooden stretchers on their own, import canvases for paintings from China and print layouts for coloring books at their enterprise.
Brushme products have been shipped to 24 countries, including the UAE, Qatar, and Israel. The company supplies products to the Empik and Virgin Megastore chains. Brushme paintings by numbers are also sold on the Polish marketplace Allegro.
Entrepreneurs tried to enter the Etsy marketplace several times, but there were not enough resources and volumes. "The volumes we sold there did not suit us at all. We spent more time," says Kravets. The company started cooperation with Ukrainian retailers only in 2022.
This year, Ukrainian entrepreneurs sent the first container with their goods to the Republic of South Africa. "We are proud that we were able to create a product in Chernivtsi that is consumed by people on another continent," says Kravets. In 2022, Brushme's annual income, according to the entrepreneur, amounted to UAH 121 million.
Ekaterina Liebman once drew attention to the fact that most of the children's modeling products presented in Ukraine are from China. "I wondered why it was always China, why it was not possible to produce everything in Ukraine and offer it to the European market," the entrepreneur recalls. No sooner said than done. In 2016, she founded the First Fantasy Factorycompany to produce kits for creativity under the OKTO brand. To distinguish herself, the entrepreneur came up with the idea of making paintings that are not painted, but sculpted from special materials.
"The idea behind the OKTO brand is that paintings don't have to be painted," says Liebman. She calls her niche "sensory art", because when a person sculpts, at that moment the sensory sensations of the fingers are involved, which has an anti-stress effect. The average cost of such paintings by numbers is 700 UAH.
Own design is a competitive advantage in this business, the entrepreneur is convinced. Its product has been noticed and recognized in the international market, because Chinese manufacturers cannot offer an original design. "This uniqueness makes it easy for us to negotiate with other companies abroad," she says. – An extraordinary product will always be of interest to both the distributor and the end consumer. Companies from the EU do not want to buy from China, because these are just products copied from each other."
OKTO paintings can be purchased from the Polish chain Biedronka and the American Barnes & Noble. The Liebman brand is also officially represented on the Amazon marketplace. Revenue, according to the company, in 2022 amounted to UAH 120 million.
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